It would look awfully strange if the U.S. government wound up targeting only foreign banks as part of its investigation into the manipulation of the London interbank offered rate.
It’s too soon to say if that will be the end result. But time is marching quickly.
Bloomberg columnist Jonathan Weil writes:
A year ago this week, Barclays cut a $160m nonprosecution agreement with the U.S. Justice Department and became the first bank to admit to falsifying its Libor submissions. Two other European banks - UBS and Royal Bank of Scotland - have reached Libor-related settlements with U.S. prosecutors since then, each with much harsher penalties than Barclays got.
Libor is the interest-rate benchmark used in hundreds of trillions of dollars’ worth of financial contracts, from derivatives to mortgage loans. It is based on daily surveys of large banks about their borrowing costs. That it was rigged for years by large banks is well-established. Still unclear is which other lenders will be held accountable, or when.
Will the feds go after any U.S. banks ? Last week’s criminal charges in the U.K. against Tom Hayes, a former derivatives trader at UBS and Citigroup, only add to the curiosity. They came six months after U.S. prosecutors filed their own criminal complaint against Hayes and another former UBS trader. A comparison of the allegations in the two cases yields some noteworthy differences.
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Jonathan Weil joined Bloomberg News as a columnist in 2007, and his columns on finance and accounting won Best in the Business awards from the Society of American Business Editors and Writers in 2009 and 2010.
Weil was a reporter for The Wall Street Journal from 1997 to 2006, and before that at the Arkansas Democrat-Gazette in Little Rock. He grew up in Hollywood, Fla., and has a bachelor's degree from the University of Colorado at Boulder and a law degree from Southern Methodist University.